Bhorjraj, Sanjeev, Charles M.C. Lee, and David T. Ng, International valuation using smart multiples资料.pdfVIP

International Valuation Using Smart Multiples Sanjeev Bhojraj Charles M. C. Lee ** David T. Ng th Current Draft: March 14 , 2003 Preliminary and Incomplete Comments Welcomed ** Correspondences can be directed to Sanjeev Bhojraj (SB235@cornell.edu), Charles M. C. Lee (CL86@cornell.edu), or David Ng (dtn4@cornell.edu). Bhojraj and Lee are on the faculty of the Johnson Graduate School of Management, Sage Hall, Cornell University, Ithaca, NY 14853. Ng is on the faculty in the Department of Applied Economics and Management, Warren Hall, Cornell University, Ithaca, NY 14853. We thank Bhaskaran Swaminathan and Paul Hribar for hopeful discussions. The data on analyst earnings forecasts are provided by I/B/E/S International Inc. International Valuation Using Smart Multiples Abstract This study develops and tests a general approach to international equity valuation using accounting-based multiples (accounting-variable-to-price ratios). Valuation theory suggests that the efficacy of multiple-based techniques will depend on: (1) the choice of the accounting variable, and (2) the judicious selection of comparable firms. We discuss key considerations in these two decisions in an international setting, and test our conjectures using data for firms from G7 countries. Our results show that the use of “smart multiples,” which incorporate industry-, country-, and firm-specific factors in selecting peer firms, can greatly reduce problems assoc